Dx makers would like to keep patent protection, but patient groups say it stifles broader access to genetic tests at lower cost.

The U.S. Patent and Trademark Office (USPTO) was expected by last Friday to issue its long-awaited report examining effective ways to provide independent, confirmatory genetic diagnostic testing where gene patents and exclusive licensing for primary genetic diagnostic tests exist.

Under the Leahy-Smith America Invents Act, Congress directed USPTO to study the issue and put together recommendations for enhancing the availability nationwide of independent confirming genetic diagnostic testing.

USPTO followed up by holding a pair of public hearings, on February 16 and March 9. The hearings largely reflected the divide in opinion between diagnostic makers eager to recoup development costs through patent protection and patient groups seeking broader access to genetic tests at lower cost.

Availability of Confirmatory Tests

Myriad Genetics, which said it spent $500 million over 17 years on its BRCAnalysis test before breaking even, submitted to USPTO a 27-page filing that in part rejected a key argument of critics raised at both hearings, namely that a dearth of confirmatory, or “second opinion,” testing existed. The company cited the availability at seven labs nationwide other than Myriad’s of confirmatory tests on the BRCA1 gene and at six labs outside of Myriad for confirmatory BRCA2 gene tests.

Myriad then offered two answers to the logical follow-up question: Why is that availability not widely known? One answer noted correctly that health insurers are unlikely to reimburse duplicative confirmatory testing, a disincentive to promoting it among doctors. That’s a factor Myriad cannot totally control and even advocates must concede is significant.

Left unsaid is that in many cases, insurance is unavailable to patients because companies and insurers need to hammer out reimbursement agreements both can live with, a task the American Medical Association and several patient advocacy groups told USPTO is complicated by the patentability of diagnostic tests. One recommendation for USPTO—or Congress if the agency doesn’t do so—should be to consider setting Medicaid and Medicare decision timeframes that discourage delays.

Myriad’s second answer maintains that: “There is no significant need for second opinion testing.” Reasons cited range from self-serving (“The high quality of testing provided by Myriad”) to circular (“Myriad has never received a request by a patient or healthcare practitioner for permission for a third party to conduct a second confirmatory test.”) The latter reason is the logical result of the availability of confirmatory tests not being widely known. Myriad also argued that confirmatory tests could produce “grey market erosion” of the rights of diagnostics developers, a legitimate concern that a verification process should easily address.

Patents’ Impact on Diagnostics

Myriad seeks to protect seven patents related to BRCA1 and BRCA2 and its method for analyzing those genes for mutations associated with breast cancer in Association of Molecular Pathology (AMP) et al. v. US Patent and Trademark Office, a closely-watched federal patent case now under appeal in the U.S. Court of Appeals for the Federal Circuit. The American Civil Liberties Union (ACLU) is counsel-of-record to AMP and co-plaintiffs, which advocate a ban on gene patenting. ACLU urged USPTO to enact a moratorium on new gene patents covering “naturally occurring genetic sequences” pending the outcome of the AMP litigation.

“Rather than promoting research and innovation, gene patents stifle basic scientific inquiry, and are therefore a violation of the spirit and letter of the intellectual property clause of Article I, § 8, of the U.S. Constitution,” according to ACLU’s nine-page filing co-signed by Laura W. Murphy, director of its Washington legislative office, and Gabriel Rottman, the office’s legislative counsel/policy advisor.

Such a moratorium would be difficult to enact, however, absent a Supreme Court decision unambiguously outlawing the practice or an effort in Congress to do so, which would doubtless trigger a multiyear legal challenge from test developers, who would argue it was an unconstitutional “taking” without compensation.

ACLU also urged USPTO to adopt findings of the April 2010 report by the U.S. Department of Health and Human Services Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS). “Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests” concluded that patents covering genetic material are unnecessary to protect scientific innovation and harm patient welfare by limiting access to and reducing the quality of genetic testing.

Value of Second Opinion Testing

Nestle’s Prometheus Laboratories unit argued in its filing to USPTO that confirmatory tests were unlikely to yield results differing from the original test, especially if found inconclusive. “A second measurement of an inconclusive result is not expected to be different from the first test if the data are processed in the same way,” Prometheus argued in a filing by Bernard Greenspan, the company’s director, intellectual property. “Reliance on a single diagnostic measurement is not how medicine is practiced, and elimination of uncertainty or inconclusive measurements will come only from further scientific research and discovery, not from repeated measurements of the same test on the same patient.”

Prometheus has spent the past nearly eight years defending two diagnostic method patents it owns against Mayo Collaborative Services (doing business as Mayo Medical Laboratories) and Mayo Clinic Rochester. In March a unanimous Supreme Court jolted the diagnostics industry by ruling that Prometheus’ methods of dosage calibration for thiopurine drugs for gastrointestinal and nongastrointestinal autoimmune diseases were ineligible for patenting, saying the measurements were too close to natural phenomena.

Echoing Prometheus, top-selling diagnostics developers Roche and Abbott argued in a 40-page joint filing that long-term, patients are better served through diverse testing procedures—not by a large number of labs performing the same tests with the same potential shortcomings.

“After all, if there are doubts about the results of a particular test, the patient likely would be better off if a different type of test for the same genetic condition is available,” Roche and Abbott concluded. “Patents coupled with competitive pressures also provide an incentive for others to ‘design around’ the patent by developing new, noninfringing tests for the same condition.

The result is a proliferation of different tests for the same condition, giving doctors and patients more options than the simple repetition of an existing test.”

Like other patient groups, Breast Cancer Action says the patent system discourages competition that can produce those new tests, reducing costs and increasing access to the technology for patients. Instead, they noted, the patent system preserves multiyear monopolies over diagnostic tests that price out too many patients.

Bridging the Divide

How can the industry-advocate divide be bridged? The nonprofit, nongovernmental organization Knowledge Ecology International (KEI) offers one intriguing solution in written comments to USPTO. KEI suggested USPTO or another agency it designates should let anyone “use any patented invention to make and sell a medical diagnostic test or service” if the test maker or service provider pays a royalty of 10% or another number into a fund. USPTO or its designee would distribute fund proceeds among patent owners.

“Under such a system, the manufacturer would have the option of negotiating a royalty for a lesser amount than paying the statutory rate to satisfy all patent claims,” KEI’s James Love and Krista Cox wrote.

The KEI fund’s success would hinge on royalty rates, which are bound to be lower than what patent holders could generate holding on to their IP. Neither would compulsory licensing work in the IP-intensive diagnostics development sphere, since patent holders can make much more money holding onto their patents than on royalties.

A more workable approach to bridging the divide is voluntary licenses that offer incentives attractive enough for industry, such as extended patent exclusivity periods or faster reviews of claims or perhaps higher royalty percentages. These licenses should prove especially attractive to nonprofits such as hospitals or universities, while allowing USPTO to expand access to genetic testing, especially to underserved patients, without trampling on the rights of patent-holders.

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